Global Economy Export Processing Zones and Peripheral Nations Essay

After taking an stock list in my place, I have found that I own 18 ‘high-tech ‘ electronic devices. On all of these points, as one might surmise, there are labels that say where they were made ; topographic points like China, Taiwan, Mexico, etc. While most, if non all, of these points were purchased from Canadian stores/companies, none of them carried a label that declared ‘Made in Canada. ‘ With big multinational corporations ( TNCs ) like Wal-Mart, Sony, and General Electric all outsourcing at least a part of their production to export treating zones ( EPZs ) in peripheral states, like Mexico for illustration ( Fry 2003 ) , it is likely that these points were produced in such topographic points.

In this paper I will get down to research how, in the thick of globalisation, EPZs are able to run under slack environmental Torahs and labour Torahs and how they perpetuate the host state ‘s dependance on nucleus states, thereby curtailing their chances to go self-sufficient in the planetary economic system.

Throughout the text, mentions to EPZs are made in conformity with a description quoted by writer Madani ( 1999:5 ) from a 1992 World Bank publication as “ fenced-in industrial estates specialising in fabrication for exports that offer houses free trade conditions and a broad regulative environment. ” The term ‘peripheral ‘ refers to the less developed states of the universe, as explained by Thomas Klak in a book from Desai and Potter ( 2002:103 ) . Peripheral states are described as missing engineering, industry/economy, wealth, and prosperity and are thought to be low-level to wealthier ‘developed ‘ states, or ‘core ‘ states. ‘Core ‘ is used to depict states that have industrial and political power and wealth and they mostly “ [ aˆ¦ ] enforce the regulations of the planetary order ” ( Desai and Potter 2002:103 ) .

Globalization continues to be a impulsive force behind the operation of EPZs. In a 2009 text from writers Williams, Meth and Willis, they discuss some of the causes and effects of globalisation on both nucleus and peripheral states, and how in the neoliberal pursuit for free trade in a planetary economic system, many peripheral states find themselves in a ‘race to the underside. ‘ Continually cut downing ordinances environing the operations of EPZs ( environmental, labour, revenue enhancement, etc. ) , authoritiess, in many instances, are underselling the competition in order to pull foreign direct investing ( FDI ) , frequently ensuing in abysmal on the job conditions for employees and major environmental and societal reverberations. Globalization has been set into gesture and reinforced by the International Financial Institutions ( IFIs ) – The World Bank and the International Monetary Fund ( IMF ) – by giving peripheral states conditional loans as portion of their trim ‘structural accommodation plan ‘ ( SAP ) , supplying “ fiscal deliverance bundles [ aˆ¦ ] ” ( Williams et al. 2009:128 ) and funding for certain development undertakings ( EPZs, etc. ) . Conditions include execution of neoliberal reforms to open up the economic system to foreign investing and TNCs, frequently go forthing small to no pick for the fighting state other than to come in into production trades with, what are now, really powerful corporations ( Williams et al. 2009 ) .

The World Bank, and the IMF promote corporations puting up EPZs and similar operations in peripheral countries in order to convey economic development – pulling FDI, making employment and industry, reassigning accomplishments and cognition to the host state, moving as a accelerator for creative activity of comfortable domestic industry ( Madani 1999:5 ) and other such additions, which seemingly lead the host state to self-sustainability in the planetary economic system.

Corporations and authoritiess likewise see EPZs runing free from rigorous environmental Torahs and ordinances as good. For the corporation, it means that they can go on to make their merchandise as-is without holding to change the stuffs used, the production procedure, or their methods /costs of waste direction. For a peripheral state, fewer environmental ordinances can be used as an inducement for TNCs to come in into production contracts, or sometimes strike waste direction trades, through which nucleus states transfer waste to them for disposal at a fraction of the cost – financially and environmentally. R. Scott Fry ( 2003 ) explains the transportation of waste from nucleus states and corporations to peripheral states, and the function that EPZs drama. Harmonizing to Fry ( 2003:328 ) nucleus states have taken to traveling production that involves the handling and disposal of risky stuffs to EPZs in peripheral states where environmental ordinances are non as stringent, due in portion to “ [ … ] unequal hazard appraisal and direction capablenesss. ” When this type of production/disposal takes topographic point, employees are exposed to risky stuffs – straight put on the lining their wellness – which in many instances are released into H2O ways, dirt, and the ambiance. The consequences so are contaminated dirt and H2O, go forthing communities without two basic resources needed for agro and other types of industry, non to advert increased hazard of unwellness and deficiency of clean imbibing H2O. Another consequence of slack environmental ordinances apart from taint is resource development. Core states and corporations are able to pull out resources, such as H2O, timber, dirt, minerals, etc. at exploitatory rates. Hess and Prasad ( 2007:184 ) quotation mark Grossman and Krueger ( 1995 ) in an article researching labour Torahs in Mexico and China, saying “ [ aˆ¦ ] developing states are willing to digest such side effects given the fiscal and technological benefits accrued by the state and the public. ” At the same clip, these ‘side effects ‘ create barriers for host states to entree and use their ain natural resources for industrial and economic intents, and so it is necessary to go on to transport out trades with nucleus states and corporations in order to prolong the export industry that they mostly depend on.

Labour Torahs are relaxed in such states for similar grounds, and in some instances where the Torahs are present, they are systematically unenforced. In a piece written for the International Confederation of Free Trade Unions ( ICFTU ) , the writers offer a comprehensive expression at EPZs in general, and supply instance surveies for nine states detailing working conditions and ordinances in specific EPZs ( Perman et al. 2004 ) . They found that the effects absorbed by employees come in many signifiers including, but non limited to, child/slave labor, unhealthy/unsafe working conditions, unpaid, illimitable overtime and deficiency of ill time/benefits, sexual harassment/assault, and highly low rewards ( Perman et Al. 2004:08 ) .

While all workers in such conditions are certainly affected, there is a considerable gender spread nowadays in the operation of EPZs, go forthing adult females to see even more desperate on the job conditions. Womans are peculiarly sought out for work in EPZs and similar operations, accounting for big parts of production and assembly staff. Based on “ preexistent gender political orientations ” adult females are assumed to be more compliant than work forces, and are pursued for boring assembly occupations necessitating “ agile fingers ” and sleight, such as assembly of electronics and vesture production ( Williams et al. 2009:126 ) . In the Philippines, in an EPZ in Laguna, adult females account for 80 % of the mill ‘s labour force of 3000 workers and are by and large paid less than work forces. Compared to other states, the adult females working in this peculiar mill are paid every bit low as one fifth of the cost of a skilled worker in Japan ( Perman et al. 2004 ) . The ICFTU besides states that adult females workers are likely to see sexual torment and other types of favoritism in the workplace including compulsory gestation proving for new recruits ( Perman et al. 2004 ) . Furthermore, for adult females who are the primary health professionals in their households, they must return from a topographic point where they are devalued and discriminated against merely to get down their work at place, looking after their kids, a scenario that can potentially enforce “ [ aˆ¦ ] an extra load of work on them ” ( Martinez 2008 ) .

The lower limit pay that an employee can be paid for their work is determined by each state ‘s authorities and is enforced under the labour Torahs of that state. Wagess in most peripheral states are well lower than those set in nucleus states like Canada and the US. To compare, the minimal pay paid in Canada presently ranges from $ 8.00 to $ 10.25/hour, or $ 1280 to $ 1640/month ( gross ) ( Munroe 2010 ) , while EPZs in Bangladesh, for illustration, are presently paying $ 0.34/hour, equal to $ 45/month ( $ CAD ) ( Dearing 2010:4 ) . This is non an uncommon monthly income for EPZ employees in a figure of peripheral states and in some instances the figure is high. The fact that EPZs provide work for members of communities where there otherwise may non be has certain advantages. Having paid work offers employees a support and a paycheque, nevertheless little it may be, to utilize as best they can. For some this can intend paying for kids to go to school, paying for wellness attention services, clean H2O services, vesture, nutrient, etc. For others, it might be merely plenty to maintain from traveling hungry. Whatever the instance may be, it is likely that the sum of money they are gaining as laborers in mills within the EPZ is non adequate to purchase the stuffs or equipment needed for start-up of any kind of little concern that finally might take to a person’s/family ‘s chance to subsidize their income or go self-sufficient. The consequence is underpaid people with small control over their lives, left with deficient clip and fundss to make a different life state of affairs for themselves, if they were so inclined. Additionally, as antecedently mentioned, one of the supposed benefits of holding a local EPZ operation is occupation creative activity for the community. However, TNCs have been known to open EPZs in one country/community and ‘import ‘ laborers from another country/community to work in the mill. As discussed in an article from the Business & A ; Human Rights Resource Centre ( 2007 ) , such a state of affairs exists between China and Zambia. Along with the one million millions of dollars in assistance that China has reportedly invested in Zambia in order to increase development ( constructing roads, substructure, etc. ) – besides came “ low-priced ” Chinese migratory workers, of the same skill degree as those in Zambia, hired to work in Chinese-operated EPZs at even lower rewards. This has allowed the corporation to run under the good ordinances ( or miss thereof ) of the zone, while using local resources and capitalising on the chance to pay Chinese migratory workers even lower rates they would pay local laborers. Without the promise of occupation creative activity, the EPZ effectually places the community in a worsened province.

For a peripheral state to be rid of EPZ industry could intend rupture of their ties with nucleus states and corporations, doing assorted consequences, changing from state to state. Based on some of the benefits that EPZs can convey into a peripheral state – FDI, employment, possible transportation of accomplishments and cognition, and industry – common consequences can be represented by the possibility of high unemployment rates ( where domestic industries are non in topographic point ) , and consecutive additions in poorness, hungriness, morbidity, and mortality rates. However, every bit long as EPZs are runing in these states their dependance on nucleus states and corporations will be perpetuated. States will look to EPZs as their chief industry, maintaining their focal point on exporting high-value added merchandises produced for markets other than their ain, with the bulk of any net incomes earned being cancelled out by the cost of importing the production stuffs.

In the instance of EPZs and the varied pros and cons associated with them, and with the universe of free trade and the planetary economic system designed the manner they are, it is clear that happening an alternate solution for peripheral states is non an easy undertaking. Since globalisation and associated neoliberal dockets have created New International Divisions of Labour ( NIDL ) , the Earth has seen a displacement in the flow of merchandises and services. The Global South is now a primary location for fabricating – stuffs for assembly flow to the Global South and value-added merchandises and net incomes flow to the Global North, stand foring a really uneven trade system ( Williams et al. 2009 ) .

One possible solution that citizens of the Global North can take part in is known as ‘fairtrade ‘ . As explained by Fairtrade International ( 2011 ) , fairtrade, as opposed to free trade, refers to a system in which manufacturers are suitably compensated for their merchandises. For manufacturers, fairtrade agencies that their merchandise is sold at a monetary value that covers sustainable production, appropriate compensation and better working conditions for employees/labourers ( Fairtrade International 2011 ) . For consumers, purchasing fairtrade means paying a slightly higher monetary value for a merchandise, but it besides sends a message. Possibly by buying fairtrade and/or locally produced points instead than merchandises from corporations who employ the usage of EPZs, corporations could one twenty-four hours be compelled to change their production and assembly methods in a manner that would finally fade out the current operating criterions found in the zones.

To reason, the information in this paper demonstrates that EPZs restrict the chances of peripheral states to go self-sufficient in the planetary economic system by runing under slack environmental Torahs, lax labour Torahs, and perpetuating the state ‘s dependance on nucleus states and corporations. Contaminated and exploited natural resources, insecure and exploitatory working conditions for employees, and holding the costs out-weighing the benefits of their export industry are cardinal factors that restrict the chances for a peripheral state to finally prolong itself in today ‘s planetary economic system.